Officials from NASA announced recently that an expired climate satellite lhad ost its orbit and would fall to Earth. People in Florida and elsewhere in the country had been wondering if their home or even their person could be hit by falling debris. It is no surprise that people question whether their insurance company will pick up the tab to repair any damage — the satellite weighs 6 tons.
The family of a young man who was seriously injured in an accident 13 years ago may finally receive compensation in 2012. The Florida Legislature will once again consider a claims bill in his case, and the insurance industry is once again mounting a campaign opposing the measure. The issue for insurers is the potential bad faith claim that could follow the bill’s passage.
The sinkhole insurance premium increase debate is over, for now. Florida’s state-backed insurer, Citizens Property Insurance Corp., will not get the rate hike it initially claimed it needed.
For all the trouble insurance causes Floridians, raising rates or leaving the state, there is an upside: Floridians must be some of the savviest insurance consumers in the country. In northern states, natives say it’s okay to complain about the weather, just understand that it’ll change in five minutes. Here, we can say the same thing about the homeowner insurance market.
Insurance is a little mysterious to most people. The risk assessment, the loss projections, rate-setting and reinsurance woes — there are days when it looks as if the industry is working off a Ouija board. “Will there be a hurricane in Florida?” The planchette, under the deft fingers of a group of insurance executives, moves to “yes.” “Will there be much property damage?” The planchette moves to a Y, then a U and, finally, a P. “Yup.”
We have talked a lot about hurricane season and the storm modeling software used by insurance companies. As insurers have evaluated the storm risks, they have proposed higher rates — Florida homeowners could be faced with huge premium increases based on the hurricane projections alone. But what would happen if actuaries factored climate change into loss projections?
We are wrapping up our discussion of 2011 weather disasters. When we began this series of posts, Hurricane Irene had not been downgraded, and the damage predictions were just beginning to come in. Since then, the bills for Irene have continued to pile up, and property insurance companies are preparing damage estimates for Tropical Storm Lee.
We are continuing our discussion of weather disasters in the U.S. As we have said in past posts, Florida’s homeowners insurance market is sensitive not only to disasters in this state but also to national and international disasters. Though the state escaped Hurricane Irene last week, it will take some time to know if the estimated $2.6 billion in damage will affect local premiums.
We are continuing our discussion of natural disasters during 2011. The U.S. has had a particularly tough year. For insurance companies, these disasters and others in foreign countries could translate into enormous losses. And although Florida has escaped most of the havoc, homeowners here will likely be paying a portion of the insurance bill.
Florida dodged Hurricane Irene this week, but much of the Eastern Seaboard will not. When the skies have cleared, the damage assessments will begin. Florida may not be so lucky when it comes to dodging the bills — maybe not directly, but through property insurance premiums.
